Options News
$HON bulls rack up large gains
Option traders have doubled their money in Honeywell. On Aug. 23, Investitute’s proprietary programs flagged the purchase of 2,500 October $165 calls for $1.42-$1.43 with shares at $157.82. This was clearly fresh buying, as open interest in the strike was a mere 65 contracts before that session began. Those calls traded up to $3.30 this […]
Option traders have doubled their money in Honeywell.
On Aug. 23, Investitute’s proprietary programs flagged the purchase of 2,500 October $165 calls for $1.42-$1.43 with shares at $157.82. This was clearly fresh buying, as open interest in the strike was a mere 65 contracts before that session began.
Those calls traded up to $3.30 this morning, more than twice their purchase prices. The stock rose 3.92% in the same time frame, showing how quickly options can far outperform their underlying shares.
Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.
HON was up 0.34% to $163.37 today. Last week JP Morgan raised its price target on the industrial manufacturer to $175 from $170, saying it deserves a premium multiple.